The price of gold has climbed steadily since the COVID-19 pandemic began about six months ago, rising by about 40% from the bottom of US$1474 on March 19.
Historically, the price of gold has been on the upward trend over the last 50 years.
More recently, the impact of COVID-19 has driven investors to park their money in this metal as a safe haven.
Gold outperformed all major assets in the first half of 2020, providing an almost 17% return, according to the World Gold Council.
Federal Government
The September Resources and Energy Quarterly shows Australia’s gold exports are forecast to reach a high of $31b in FY21, making gold the country’s third largest commodity export behind iron ore and LNG.
Federal Resources Minister Keith Pitt says Australia is now on track to become the world’s largest producer of gold by 2021.
“Strong prices for gold, iron ore and other minerals are leading to new investment plans, including the reopening of gold mines long closed and a steady stream of new projects awaiting final investment decisions,” he said.
While the International Monetary Fund (IMF) projects a 4.9% reduction in global growth in 2020, Australia is well-placed to weather the financial impact from COVID-19 and global lockdowns due to its focus on gold mining and the resources sector.
“The resources sector has underpinned Australia’s economy throughout 2020 and will continue to play a crucial role for the nation as the global economy recovers from the COVID-19 pandemic,” Mr Pitt said.
“Robust commodity earnings will be more important than ever to the Australian economy as the country emerges from the largest global contraction since the 1930s.
“Australia’s reputation as a reliable, low-cost supplier of mineral and energy products remains intact, with virtually no operational COVID-19 shutdowns, unlike some of our competitors.”
Mine expansions
The top 40 global mining companies by market capitalisation at December 31, 2019 include Newmont Corporation and AngloGold Ashanti.
The report, titled Mine 2020, released by PricewaterhouseCoopers (PwC) in June this year, ranks Newmont at number seven and AngloGold Ashanti at number 26 globally.
Both mining giants have mine expansion projects underway in Australia, Newmont with its Tanami Expansion 2 project and AngloGold Ashanti with its Boston Shaker underground mine development, which has recently achieved commercial production.
Tanami Development
Newmont is the number one gold producer in the world, with assets producing more than 6mozpa of gold to 2029.
Within Australia, Newmont’s world-class ore bodies include the Boddington gold mine in WA and the Tanami operation in the Northern Territory.
The fully-owned Tanami underground mine has been in operation since 2002 and produces an average of 500-600koz gold per annum.
The Tanami Expansion 2 project aims to increase production by an additional 150,000-200,000ozpa for the first five years beginning 2023.
Newmont Tanami Operations general manager Vince De Carolis says the project is going well, with all critical activities progressing to plan, despite the current COVID-19 climate.
“The Tanami Expansion 2 project cements Newmont Tanami’s position as a key asset for the Northern Territory and will extend the life of mine out to 2040,” he said.
“This expansion demonstrates our confidence in the mineral prospectivity of the Tanami district.
“The project includes the construction of a vertical shaft and 80m headframe at the Callie underground mine, along with supporting infrastructure.
“Box cut for the production shaft foundation was completed in July, and a second raise bore was placed on surface.”
Newmont has the largest reserve base in the industry at 100.2moz in 2019, underpinned by world-class ore bodies in top tier jurisdictions.
Latest Newmont production figures in the three months to June show the Boddington and Tanami operations are on track to meet annual guidance of 553koz of gold for 2020, with 294koz achieved in the three months to June.
Tropicana Development
Tropicana, a joint venture with IGO in which AngloGold Ashanti has a 70% holding, is an open pit operation 200km east of Sunrise Dam and 330km east-northeast of Kalgoorlie in WA.
Consisting of the Tropicana, Havana, Havana South and Boston Shaker open pits, the joint venture approved the $105m development of the Boston Shaker underground mine in March 2019.
The underground project recently achieved commercial production, reaching a rate of 0.7mtpa, on-time, below budget and with no recordable safety incidents.
AngloGold Ashanti senior vice president Michael Erickson said underground mining at Boston Shaker will leverage further value from this high performing operation, achieving payback in just over three years.
“The underground mine will contribute higher grade mill feed from the current quarter onwards, improving the gold production profile and enhancing cash flow during the calendar 2021-2023 when the mine plan includes periods of higher waste stripping in the Havana open pit,” he said.
The first production stope was fired in June 2020 and production is currently ramping up, expected to reach full capacity by the first half of 2021.
The Boston Shaker underground mine at Tropicana will contribute about 100,000ozpa of gold over a seven-year mine life.
Underground diamond drilling at the Boston Shaker decline is also scheduled for December 2020, while the joint venture continues with its Havana stage 2 open pit cutback to access the deeper Havana open pit ore from 2022.
A decision on the Havana Stage 3 open put cut-back is expected to be made in 2021.
AngloGold Ashanti is aiming for annual gold production from the Tropicana mine of between 450,000-500,000oz from 2022 onwards.
Boddington Automation
Automation can help in a crisis by reducing on-site presence, streamlining processes, computerising workflows, limiting production risks and reducing inefficiencies.
Earlier this year, Newmont approved full funding for the implementation of the first Autonomous Hauling System (AHS) in an open cut gold mine at Boddington in WA.
With an investment of $150m into Boddington’s AHS, the fleet of autonomous CAT 793F is expected be fully operational at the site in 2021.
Newmont aims to generate an internal rate of return of more than 35% with this more controlled and efficient haulage operation, and in turn to extend the mine’s life by at least two years.
Newmont Boddington Operations general manager Mark Rodger says the project remains on track for full deployment, setting a new industry benchmark in safety and efficiency.
“Boddington was selected as a mature operating site with demonstrated technical leadership in innovation,” he said.
“Despite COVID-19, necessary work has continued for deployment, including orders for long lead items, infrastructure upgrades and execution of a robust people strategy which includes providing opportunities for reskilling and redeployment of haul truck drivers to other roles supporting AHS.”
Once fully operational in 2021, Boddington will be the world’s first open pit gold mine with an autonomous haul truck fleet.
Boddington is WA’s largest gold producer and currently employs about 1200 staff and 500 contractors.
Tropicana Automation
In what is believed to be an industry first for hard-rock mining, AngloGold Ashanti has rolled out a $6m autonomous drill fleet at Tropicana this year, after a successful trial in 2019.
Macmahon Holdings, the mining contractor at Tropicana, now operates five autonomous CAT MD6250 drill rigs as part of its drilling fleet at the mine site, with support from Flanders, a world leader in autonomous drilling.
Within a month of transitioning from manned rigs, the autonomous fleet recorded an 8% increase in instantaneous penetration rates and a 14% reduction in delay times.
A drill controller can operate up to five rigs from one console, with two ground crew on the pit floor supporting the automated rigs.
AngloGold Ashanti manager technology Martin Boulton says the autonomous drill fleet has benefitted the Tropicana mine site.
“[There are] increased operating efficiency and asset utilisation as the equipment can operate through lightning and inclement weather, explosive detonation and eliminates the need for operator fatigue breaks,” he said.
